Unmanned Aerial Vehicles (UAV) - Business Gateway

Unmanned Aerial Vehicles (UAV)

This pack has been designed to provide information on setting up a business in the Unmanned Aerial Vehicles
industry in Scotland, as well as helping to inform the market research section of your business plan. You can find
more information on how to write a business plan from the Business Gateway website
(www.bgateway.com/businessplan), including an interactive template and tips to get you started.

This market report was updated by Business Gateway in March 2021. If you find the information contained in this
document useful, tell us about it! Send us feedback here; we will use your comments to help improve our service.

What do I need to know about the Unmanned Aerial Vehicle market?
The following summary statistics have been taken from market research reports and reliable resources that the
Information Service uses to compile industry information. They should give you an indication of how your industry
is faring at present and whether there is demand for your type of business:

    ♦   COVID-19’s Effect on the Commercial UAS Market: There will be many companies that simply cannot
        remain in business because there will be a decreasing demand for drones and services. The decrease will
        not be because the utility of drones is not recognized, but because business will not be able to afford such
        services. (Frost & Sullivan, Global Commercial UAS Market Outlook, 2020)
    ♦   A new set of rules for the EU were adopted in 2019 and go into effect formally on 1 June 2020. The new
        rules include technical as well as operational requirements for drones, and these will replace individual
        nation rules. Commercial drones over 250g will still need to be registered with national authorities. (Frost
        & Sullivan, Global Commercial UAS Market Outlook, 2020)
    ♦   Last mile drone delivery will not become the growth market hype would suggest. There simply will not be
        enough demand for vanity items to drive investment in the infrastructure required. Middle mile and
        delivery of medical supplies and medicines will drive drone delivery demand. A recent Hawthorn Group
        survey found that 49% of respondents considered home drone deliveries too dangerous. (Frost & Sullivan,
        Global Commercial UAS Market Outlook, 2020)
    ♦   The commercial UAS platform market is growing at a steady rate and is predicted to level off as market
        hype wears off and the actual business of using drones to achieve a combination of cost efficiencies, time
        savings, and increases in safety takes hold. While the total market for drone platforms is forecast to level
        off, APAC will see more significant growth due to the lifting of commercial drone bans and an increasing
        demand for applications where drones can replace more expensive technologies. (Frost & Sullivan, 2019
        Global Commercial UAS Market Outlook, April 2019).
    ♦   By 2030, the increasing use of drones could result in a £42bn increase in UK GDP, £16bn in net cost savings
        to the UK economy, and 628,000 jobs in the drone economy. The level of costs savings and GDP uplifts will
        vary across industries, with key beneficiaries being the construction and manufacturing industries; the
        technology, media and telecoms sector; financial services; transport and logistics; as well as public sector
        services (including defence, health and education). (PWC, Skies Without Limits, 2018).
    ♦   Industry bodies include the Association of Remotely Piloted Aircraft Systems UK (ARPAS-UK)
        (www.arpas.co.uk), the Royal Aeronautical Society (www.aerosociety.com) and the British
        Association of Remote Sensing Companies (BARSC) (www.basrc.org.uk).

Where can I find more information on my market?
The Information Service has access to a number of databases which can offer more detail on this industry. Some
of these reports are listed below - if you would like to be sent extracts from any of these reports, please contact
us on 0300 013 4753 or email info@bgateway.com.

    ♦   Frost & Sullivan - Drones in the Global Power and Utilities Industry, Forecast to 2030 (February 2020).
        Many utilities have started developing in-house drone teams which certify pilots, technicians and data
        analysts rather than relying on DSPs. By doing so, they are able to increase their return on investment (ROI).
        In some cases, DSPs partner with utilities to build drones and associated platforms, train the utilities‘
        personnel and finally transfer drone operations to the utilities‘ in-house team and act as external
        consultants (BET model). As the penetration of drones in the power & utilities industry increases, DSPs have
        started leveraging AI and Big Data to develop specialized platforms for analysing drone data.
    ♦   Mintel - Attitudes Towards Home Delivery and Takeaway, UK (March 2020). 35% of takeaway diners
        would be happy to receive an order via drone, with Londoners (50%), Young Millennials (58%) and more
        affluent consumers most keen. 16-34 year old men are the core demographic for drone delivery, with 62%
        of them open to drone delivery compared to just 43% for women of the same age. However, older
        consumers are more hesitant to accept the technology, noting either the lack of difference it may add to
        the overall experience or the elimination of personal interaction with delivery drivers.

There are also a number of online resources you may find helpful:

    ♦   The World Economic Forum - We’re about to see the Golden Age of Drone deliver – here’s why. June 2020.
        This article offers a contrasting conclusion to that expressed in the Frost and Sullivan market reports quoted
        above, as it sees the circumstances surrounding the Covid-19 pandemic as a significant drive towards drone
        delivery services. (tinyurl.com/y7pwyyfj).
    ♦   The Forecast (by Nutanix) - How Covid-19 Created a Perfect Storm for the Future of Drones. August 2020.
        Offering another more optimistic vision for the industry, this article talks about the potential for increased
        interest in drone delivery options from large e-commerce and logistics businesses. There are still some
        challenges that must be overcome (such as the influence weather would have on such a service) which are
        also discussed. (tinyurl.com/abc9kthc)
    ♦   GSMA - How the emergence of connected drones is helping the fight against Covid-19. July 2020. This article
        talks about potential applications for drone technology in efforts to counteract the Covid-19 pandemic.
        (tinyurl.com/rju799bc).

    Disclaimer: This report has been updated in March 2021 - we have included Post COVID-19 market material
    where available. Please note that this research may contain copyrighted material. Copyright belongs to
    the holders credited above and, as such, recipients of this research reproduce and repurpose this
    information at their own risk.

How can I find out about my competitors?
Business Gateway’s online guide to Competitor Analysis explains how to find your competitors, how to research
what they’re doing and how to act on what you learn about them.
Immediate competition will be from other businesses in your local area. There are several online directories
which can be used to find company information and generate lists easily and at no expense. Many Local
Authorities also publish local business directories on the web. Below are some key web resources:

    ♦   General business directories such as Yell ,Thomson Local or Google Maps
    ♦   Trade specialists like EuroPages (European directory), The Wholesaler or Free Index
    ♦   Business to business (B2B) specialists such as Kompass

Likewise, your local Chamber of Commerce may publish a members’ directory; find your local Chamber on the
Scottish Chambers website.

Once you’ve identified who your competitors are, the next step is to gather information on the way they do
business. Which services do they provide? How do they market themselves? How much do they charge?
To learn about your competitors:

    ♦   Look for articles or adverts in local newspapers, trade press and directories.
    ♦   Try to read their marketing material; if the company has an online presence, visit the company’s website
        as a first port of call. Not only does it give you a better understanding of the company’s activities, it can
        also offer a wealth of information such as a company history or staff biographies, as well as the
        company’s partners or suppliers
    ♦   Search for information on limited UK companies via the Companies House website
    ♦   Gain an insight into your competitor’s performance using credit checks and the accounts that limited
        companies are required to submit to Companies House each year.

We can provide credit checks free of charge; if you are interested in using this resource, or looking for us to help
you find relevant publications, please contact us by emailing info@bgateway.com or by calling 0300 013 4753

What about suppliers?
Choosing and Managing Suppliers can help you decide what you need from a supplier, how to identify one and
how to choose one to deal with.
Trade associations or industry specific organisations may also be able to recommend suppliers or contacts. You
can also use the aforementioned resources for finding competitors to find suppliers.

Once you have decided on a supplier, we can run a credit check on the company to help assess their financial
stability. We provide credit checks free of charge; if you are interested in using the resource please
info@bgateway.com or by calling 0300 013 4753.

Who are my customers?
Your business plan should include information about the customers you would expect. Business Gateway’s guides
on Retaining and Grow Your Customer Base will help you to identify who your customers are, how to use this
information to sell more effectively and how to actively compete in your marketplace.

It can be useful to group your customers by geographical location, age or lifestyle. The websites listed below are
freely available and can provide most of this information. If you can’t find what you’re looking for from these
website, please contact us and one of the team will be happy to help:

    ♦   Access the latest population estimates from the National Records of Scotland (NRS). NRS also offers
        demographic factsheets for each council area in Scotland, which can provide summary statistics for the
        area you will be based in.
    ♦   Information from the most recent census in 2011 is released via the official website. See in particular the
        Census Area Profiles. Clicking on your area of interest will give the latest population figures, including
        estimates by age.
    ♦   Understanding Scottish Places has interactive profiles of towns and cities across Scotland. It can be useful
        for understanding the interrelationships and flows between towns, and also gives comparisons between
        two or more places.
    ♦   Scottish Government Statistics provide accurate and up-to-date statistics on Scotland, covering
        population, health, education and housing.
    ♦   The Scottish Household Survey provides information on the structure, characteristics, attitudes and
        behaviour of Scottish households, both at a national and local level.
    ♦   Office for National Statistics (ONS) is the recognised national statistical body for the UK. ONS covers a
        wide range of demographic, economic and social issues at a UK level.

How can you help me with other aspects of starting my business?
The Business Gateway website has guides, videos, online tutorials and tips on all aspects of starting up a business
in Scotland. Follow the links below to explore each resource:

Accountancy                                                          Pricing
Institute of Chartered Accountants of Scotland’s                     Business Companion Pricing & payment guide.
(ICAS) “Find a Chartered Accountant” tool                            Please note: the most effective way to research
                                                                     pricing is to conduct your own research – visit
Funding                                                              wholesalers or suppliers to obtain price lists, find
                                                                     quotes from similar companies and work out what
Practical information on finance and funding for
                                                                     other businesses in your area are charging
starting and growing your business

                                                                     Promotion
Insurance
                                                                     BG guides to Marketing
Business insurance guide

                                                                     Training
Legal Help
                                                                     Skills Development Scotland’s My World of Work
Gov.uk “Licence Finder” tool
                                                                     Funding for training
Law Society of Scotland’s “Find a Solicitor” tool
                                                                     Small Business Bonus Scheme (Scotland)

     Your local Business Gateway can offer events, workshops and 1:2:1 support on all aspects of starting and
     developing your business. Call the helpline on 0300 013 4753 to find out what is available in your area.

     We hope you find this Market Report useful and we’d love to hear your feedback here.

Although every effort has been made to ensure the accuracy of the information provided, Business Gateway will not be held
liable for any inaccuracies or omissions in the data supplied, or for the content of any website that the document above may
contain links to. By using this information, you accept this disclaimer in full. Also, please note that Business Gateway does not
endorse any business or individual that may be referred to above.

You must not rely on the information in the report as an alternative to advice from an appropriately qualified
professional. If you have any specific questions speak to your Business Gateway Advisor or consult an appropriately
qualified professional.

Last updated: March 2021
Updated by: Eleanor